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Australian shares tanked more than 2.5 per cent to a seven-week low before mounting a partial rebound as US index futures kicked higher.
The ASX 200 tumbled 178 points in early action to 6800, a level last seen in early January. The blood-letting peaked in the first 40 minutes, after which the benchmark index trimmed its loss to 91 points or 1.3 per cent at 6887 as a rally in US futures raised hopes this week’s dramatic sell-off on global markets was overdone.
S&P 500 index futures were lately ahead 32 points or 1 per cent, hinting at a possible rebound tonight. The benchmark US index plunged 3.35 per cent overnight to its worst loss in two years after a spike in international coronavirus infections reignited fears of a global economic slowdown.
This morning’s US futures rally followed a Twitter pep talk from US President Donald Trump. The president tweeted that the virus was under control in the US, health authorities were working hard and the stock market was “starting to look very good to me!”
Asian markets recouped some early losses. Japan’s Nikkei, which was closed yesterday, played catch-up with a fall of 3 per cent. China’s Shanghai Composite shed 1.1 per cent, while Hong Kong’s Hang Seng edged up 0.1 per cent.
All 11 sectors declined this morning, with defensive sectors faring almost as badly as growth stocks. The telecommunications sector slumped 2.4 per cent as Telstra shed 3 per cent.
The materials sector dropped 1.9 per cent to its weakest level since early December as BHP lost 1.5 per cent and Rio Tinto 1.3 per cent. The big four banks lost between 1 and 1.7 per cent.
Companies reporting found traders were in the mood to sell first and ask questions later. Tech darling Appen opened 8 per cent in the red despite beating its full-year earnings guidance. Shares were lately up 6.7 per cent once the dust settled. Similarly, import-export logistics specialist Qube Holdings saw its shares tumble as low as $2.80 before rebounding to $3.22 in recent action after the company warned of a potential earnings hit from the Covid-19 virus.
Other winners from the last week of interim earnings included Jumbo Interactive, up 4.2 per cent, Spark Infrastructure, up 3.4 per cent and Seek, up 2.8 per cent. Losers included Primero Group, down 23.3 per cent, and Wagners Holding Company, down 17.7 per cent.
A sharp reversal in gold sent gold miners to the woodshed. St Barbara slumped 6.8 per cent, Saracen Mineral 6.7 per cent and Newcrest 2.6 per cent. Gold plunged $23.40 or 1.4 per cent this morning to US$1,653.20 an ounce.
Brent crude rebounded 32 cents or 0.57 per cent to US$56.62 a barrel.
The dollar bounced 0.23 per cent to 66.19 US cents.
What’s hot today and what’s not:
Hot today: Good-news stories were scarce on a day when traders’ screens were splashed with crimson. Gold miners rode the storm better than most, and Stavely Minerals (ASX:SVY) best of all after reporting “exceptional grades” at its Thursday Gossan copper-gold project in western Victoria. Executive Chairman Chris Cairns said, “The strike extent of the mineralised system is now in excess of one kilometre and open to the south-east and down-dip.” SVY shares climbed eight cents or 11.9 per cent to 75 cents.
Not today: Biotech Holista CollTech (ASX:HCT) had been one of the big winners from the Covid-19 scare, with the share price more than tripling since the company reported strong demand for its sanitisers. Buying accelerated after the company declared it would co-develop a nasal balm using the company’s proprietary Path-Away ingredient “that has been proven to kill all previously tested corona-type viruses”. The share price dived 28.2 per cent this morning after the company was forced to retract claims made in two ASX announcements because they did not comply with the exchange’s Biotech Code.
